Completing the Application, Underwriting, Delivering Policies, Contract Law
An applicant with superior health, excellent family history, and non-smoker status is placed in which underwriting risk class, receiving lower premium rates?
Answer and explanation
Answer: C. Preferred risk class is reserved for applicants with above-average health profiles, qualifying for discounted premium rates.Source: NAIC Risk Classification Guide — Preferred Risk
More completing the application, underwriting, delivering policies, contract law questions
- An applicant submits an application without premium. The policy is issued as applied for. Before delivery and premium collection, the applicant suffers a severe heart attack. What must the producer do at delivery?
- An applicant submits truthful application statements and the required initial premium. What does the insurer furnish as its side of the contract's consideration?
- An applicant will keep an existing policy nominally in force but reduce its face amount to fund the new policy. Which replacement disclosure is appropriate?
- An applicant with average health, normal build, and no hazardous hobbies is classified into which standard underwriting category?
- An application stipulates that coverage will not begin until the policy is delivered, accepted, and the first premium is paid. If the policy is delivered but the initial premium remains unpaid, why is the insurer not liable for a claim?
- An insured pays a single monthly premium and dies the next week, and the insurer pays the full face amount. Which contract characteristic does this illustrate?
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